Introduction
The Balanced Scorecard is a strategy management framework used to examine an organization from four perspectives to facilitate the development of high-level organizational objectives, measures, and initiatives. From a financial perspective, the organization’s financial performance and the use of financial resources are considered. Profit and revenue are key profit indicators (KPIs) that most companies include in this perspective (Baldegger, 2012). Other objectives comprise profit margins, cost-saving and efficiencies, and revenue sources (Marr, 2020b). On the other hand, from the customer perspective, organizational performance is examined from the standpoint of critical stakeholders or consumers. These can comprise KPIs such as market share, brand awareness, and customer service and satisfaction. In the context of global expansion, the company should consider the growing market share in the intended country.
The internal process perspective regards the efficiency and quality of an organization’s performance concerning products, services, or other major business processes. This constitutes the processes that the business has in place and the internal operational goals and objectives that it should implement to drive performance (Marr, 2020b). Examples of KPIs related to this perspective include process improvements (streamlining internal processes), quality optimization (decreasing manufacturing waste), and capacity utilization (employing technology to improve efficiency). Lastly, the learning growth perspective encompasses a broad spectrum of intangible performance drivers, including infrastructure, human capital, culture, technology, and other capacities central to breakthrough performance.
Other Strategic Management Frameworks for Global Expansion
In addition to the BSC, other strategic management frameworks can be used for global expansion, and they include the Objectives and Key Results (OKR) and the PEST model. The OKR is relatively similar to the BSC as both are focused on top strategic priorities, which are objectives and metrics. However, the difference between the two is cadence. In the BSC, the objectives and measures are designed to last at least a year, whereas, with OKRs, they are changed quarterly (Marr, 2020a). Furthermore, unlike the BSC, the OKR does not utilize the four parameters for creation. The PEST model is established around forces that influence the political or legislative, economic, socio-cultural, and technological aspects of the prospect countries on the organization’s health. This tool is particularly useful when starting a new business or entering a foreign market. This will enable the company to identify the macro-environmental factors that affect its operations in becoming more competitive in the global market (Baldegger, 2012).
Importance of Combining Different Strategies When Pursuing Global Expansion
Every strategic management framework has distinct advantages and disadvantages. Therefore, by combining them when pursuing global expansion, an organization can override the disadvantages and facilitate the acquisition of comprehensive findings that encompass every business aspect. For instance, combining the OKR and BSC will result in the former having a more improved visualization, and the latter, having regular cadence. Overall, this blending approach provides a more successful way of framing and executing high-level strategies. Furthermore, upon the inculcation of the PEST model, the organization will have a deeper understanding of external processes, such as legislation in other countries that might be relevant to the business, economic factors affecting sales and profits, social factors influencing consumer buying behavior, and technological factors that could affect processes. Considering the analytical findings of these three frameworks, the organization will be able to successfully establish its operations in prospective countries and yield significant revenue.
References
Baldegger, R. (2012). Management in a dynamic environment: Concepts, methods and tools. Springer Gabler.
Marr, B. (2020a). OKRs vs BSC: What is the difference? Web.
Marr, B. (2020b). The four perspectives in a balanced score card. Web.